CF: tactical, buy around $132, stop $122. CF makes nitrogen fertilizer but has a second angle: supplying ammonia as a feedstock for hydrogen fuel production. Geopolitical risk around the Strait …

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The macro risks we talked last week started to showing up this week, both the long-term interest rates and crude oil prices are climbing up.

The 10-year Treasury yield pushed to 4.81%, a fresh multi-month peak, and the chart shows minimal technical resistance between here and the 5% mark. Crude accelerated overnight as friction between Washington and Tehran resurfaced. The combination is unhelpful: energy costs feed straight into inflation at the same moment tighter yields are squeezing financial conditions. Odds of another Fed hike have repriced sharply higher, and rate-sensitive corners of the market are absorbing the first blow.

Index-level damage stayed modest. The Nasdaq gave up 1.03%, the S&P 500 slipped 0.71%, and the Dow eased 0.79%. Turnover shrank on both exchanges, so this was not the heavy, institution-driven selling that signals genuine distribution, and the averages remain within reach of their highs. Judged only by the indexes, this still reads as a pullback inside a standing uptrend.

Underneath, the story is less comfortable. Smaller companies are absorbing the worst of it — the Russell 2000 and MidCap 400 have both cracked intermediate-term support, and the list of individual names deteriorating keeps growing.

Friday’s jobs report becomes the next real examination for the bond market, but the point is not to forecast the print. The 10-year, the small-cap indexes, and the hit rate on breakouts are already showing us the signals. The primary trend holds, SO FAR; the market’s character is what has shifted.

Sector Highlights

Energy is the standout beneficiary. Rising crude is lifting Oil & Gas Equipment, Field Services, Drilling and Refiners, and the individual charts confirm it. FTI cleared its base Monday near the top of its range and defended the move Tuesday.

Industrials are uneven, with DE the exception worth owning. It broke out Monday on volume 49% above average, then added 3.23% Tuesday on a further 45% volume expansion, printing new highs and closing at the top of the range.

Technology leadership keeps narrowing. Select software and cybersecurity names — PLTR, CRWD, PANW, MSFT — still act well, while semiconductors and AI hardware have stalled. SOXX sits beneath both its 21-day and 50-day averages, and MU’s breakout attempt failed hard. Software demands discrimination too: FROG lost 8.28%, LITE 5.01%, and TWLO 2.96%. One bright spot ahead — DELL is sharply higher premarket on strong AI-server demand, a sizable step-up in orders and backlog, and raised full-year guidance. AVGO reports after today’s close, and together the two reactions will show whether AI infrastructure strength can widen out against a rising-rate backdrop.

Financials show the most visible erosion. Regional banks and several large institutions have weakened in tandem.

Health Care stays a stock-picker’s group with a few names improving.

Bottomline: We have taken a more defensive approach - reduce high beta tech names, partially move to defensive oil and agriculture sector. We will watch closely as the market plays out.

Don’t fight the market; bend with it. By protecting your downside with strict stops, let winning positions run, you allow the market naturally lead your money to where the gains are flowing.

Investment Impact

■ A 43% EPS beat that was almost entirely margin, not revenue

Revenue of $46.97B beat FactSet consensus of $44.9B by $2.07B (4.6%), but non-GAAP EPS of $7.04 beat the $4.91 consensus by $2.13, or 43%. That gap is the story of the quarter. ISG operating margin came in at 15.0% against a consensus of roughly 11.0% — a 400bps surprise worth about $1.27B of operating income, or $1.60 per share after tax, which is roughly three-quarters of the total beat. Revenue upside contributed only about $0.25 per share; CSG margin, corporate items, below-the-line and the 5% lower diluted share count added the remaining $0.29. Total non-GAAP operating income of $5.93B was some $1.69B (40%) above the ~$4.24B implied by consensus EPS, a 320bps operating-margin surprise. The market has spent four quarters debating whether AI servers could be sold at a real margin. This quarter Dell answered that question more emphatically than any prior print, and it did so while absorbing acknowledged DRAM, NAND and CPU cost inflation.

■ Guidance raised by $25B — the third and largest FY27 raise in six months

Management lifted FY27 revenue guidance to $192.0B from $167.0B and non-GAAP EPS to $25.50 from $17.90. Against the original February 2026 guide of $140B and $12.90, revenue guidance is now 37% higher and EPS guidance is 98% higher — the full-year EPS outlook has doubled in two quarters. The Q3 guide of $49.0B revenue and $6.50 non-GAAP EPS sits 18% and 45% above LSEG consensus of $41.42B and $4.49 respectively, and the FY27 guide is 11% and 35% above the LSEG full-year consensus of $172.67B and $18.92. Dell is no longer beating the Street; it is repricing it.

■ A record $95B AI backlog converts this from a momentum story into a visibility story

Dell booked $60.9B of AI-optimized server orders in a single quarter — more than the $64B it booked in all of FY26 — and exited with a $95B backlog, up from $51.3B at the end of Q1 and $43B at the FY26 year-end. At the $74B FY27 AI-server revenue guide, the exit backlog alone represents roughly five quarters of AI shipments before a single incremental order. This is the single most important change to our thesis: FY28 revenue is now substantially pre-sold, which materially reduces the forecast risk that has historically capped Dell’s multiple. The offset is concentration — orders of that magnitude in one quarter imply a small number of very large hyperscaler and neocloud counterparties, and we have no disclosure on cancellation terms or deposit protection.

■ The cash statement is the one genuine blemish, and it deserves attention

Operating cash flow fell 13% to $2.23B on revenue that grew 58%, taking CFO to just 4.7% of revenue from 8.5% a year ago. Free cash flow fell 47% to $986M. Inventories doubled to $21.29B from $10.44B at the January year-end and payables rose to $49.72B from $33.63B, so Dell is funding an enormous AI-server ramp through its supply chain and its balance sheet. The headline $8.15B “adjusted” free cash flow (+224%) is flattered by a $6.67B add-back of financing-receivable growth — real cash extended to customers through Dell Financial Services, which we do not think should be excluded when assessing conversion quality. We treat the $986M reported FCF as the honest number. It is defensible while backlog is building, but it must inflect by Q4 or the quality of these earnings comes into question.

■ Maintaining OUTPERFORM; PT to $575 from $500 on a 40% FY28 estimate increase

We raise FY27E revenue to $196.0B from $172.0B and FY27E non-GAAP EPS to $26.60 from $19.10; FY28E goes to $238.0B and $33.00 from $205.0B and $23.50. Our $575 target applies 17.4x to FY28E EPS, down from the 21.3x embedded in our prior $500 target. The de-rating is deliberate: we are underwriting a materially larger but structurally lower-margin, more concentrated and more capital-intensive earnings base, and we are not willing to pay the same multiple for it. At $429.75 the stock trades on 16.2x FY27E and 13.0x FY28E — an unusual combination of triple-digit AI growth and a mid-teens forward multiple. Implied upside is 33.8%.

VEGI: tactical, buy $48, stop $45.60. VEGI is the iShares MSCI Global Agriculture Producers ETF that tracks public global companies involved in agricultural production, including farm machinery …

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ERO: tactical, buy $35.60, stop $32.80. Ero Copper posted $2.12 in EPS last year as revenue surged 67%. Consensus has this year’s earnings rising 83% to $3.88 per share, backed by copper prices …

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Don’t fight the market; bend with it. By protecting your downside with strict stops, let winning positions run, you allow the market naturally lead your money to where the gains are flowing.

Disclaime…

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Stocks face a stiffer challenge today as geopolitical and macro headwinds converge. Overnight military clashes between the U.S. and Iran near the Strait of Hormuz sent Brent crude surging past $91, while the 10-year yield climbed to around 4.78% — its highest since early 2025. Rate markets have shifted dramatically, now pricing roughly a two-thirds chance of a September hike versus just 35% last week. Nasdaq futures are pointing to a gap down of nearly 1%, with the S&P and Dow also under pressure.

The large-cap indexes held up through Monday’s session, but small caps told a different story — the Russell 2000 began weakening noticeably. That split between large and small is worth monitoring closely, especially if elevated borrowing costs persist. Under the surface, individual stock action remains mixed enough that a single directional call on the market would be premature. Monday delivered legitimate breakouts alongside continued deterioration in weaker names, and today’s tougher environment should clarify which of those moves have conviction behind them.

The key task today isn’t predicting where oil or rates go next — it’s reading how stocks absorb the pressure now that it has intensified. Friday’s employment report is the next scheduled catalyst that could further harden hawkish rate expectations, but the price action over the next couple of sessions will reveal whether the current macro pressure is already starting to erode the market’s technical foundation.

Sector Highlights

• Energy: The strongest near-term setup. OIH and FTI broke out Monday on strong volume and was added as a new position. The crude surge should benefit these names further — but if energy stocks can’t capitalize on a spike in their own commodity, that lack of follow-through would be a warning sign.

• Industrials: DE surged on a pullback breakout with volume nearly 50% above average, earning a new entry.

• Technology: The real question is durability under rising yields. LITE posted a 5.5% gain Monday and remains constructive, while MU holds its consolidation. The focus isn’t on the theoretical impact of higher rates — it’s on whether these names maintain relative strength when the tape gets heavier.

• Financials: Quietly building a bench of candidates. HOOD, IBKR, MS and RELY all showed notable strength.

Don’t fight the market; bend with it. By protecting your downside with strict stops, let winning positions run, you allow the market naturally lead your money to where the gains are flowing.

OIH: tactical, buy around $422, stop $396. VanEck oil service ETF. Oil service sector shows relative strength as AI trades pull back.

FTI: tactical, buy around $76.80, stop $73.50. Oil service s…

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Sell:

Sell Short: IWM, sell short $293.60, buy to cover $300, to partially hedge portfolio downside. Small caps are most sensitive to interest rate change, Russell 2000 decisively undercuts…

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Don’t fight the market; bend with it. By protecting your downside with strict stops, let winning positions run, you allow the market naturally lead your money to where the gains are flowing.

Disclaime…

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The macro picture this week was shaped by two competing forces: encouraging corporate earnings and a hawkish turn from the Fed. NVIDIA posted another beat on both revenue and earnings, reinforcing the AI spending cycle. But the optimism was short-lived. At Jackson Hole, Chair Warsh delivered a speech that markets read as decidedly hawkish, shifting the implied probability of a September rate hike from roughly 40% to 60%. By year-end, futures now price in close to a 90% chance of at least one quarter-point increase.

Domestic data was uneven. The labor market held up, and core PCE came in on consensus, but regional manufacturing surveys and consumer confidence softened. Housing remains stuck — mortgage rates above 7% continue to choke both activity and affordability.

On the fiscal and funding side, the Treasury clarified its earlier intervention remarks, insisting the goal is to address bond market illiquidity rather than to cap yields outright. No confirmation came on reports that the TGA would fund long-dated buybacks in place of new bill supply. Japan’s Ministry of Finance disclosed $96 billion in FX intervention through August 24, much of it likely financed by selling US Treasuries. That’s a headwind for the long end heading into what’s typically a heavy September corporate issuance calendar.

Oil bounced around on Strait of Hormuz headlines but remains caught between supply disruption risk and weak Chinese import demand. So far, energy pass-through into US inflation has been limited. Gold and Bitcoin both closed the week higher.

Market Overview

Equities posted modest gains for the week, but the underlying breadth and volume data tell a more cautious story. The S&P 500 pulled back toward its 6-week moving average after breaking out of a multi-week sideways range — a normal retracement for now. If the index starts living below that average, the tone shifts. The NASDAQ is in the key area: repeated rallies to resistance, followed by selling, with no clean resolution.

Rates are where the tension is building. The 1-year yield turned sharply higher and is pressing its 4.13% high. The 2-year already trades above fed funds, confirming the market expects tighter policy. The 10-year, at 4.73%, didn’t break out this week, but the price action is setting up for one. Closes have been clustering near the highs with tight weekly ranges — a volatility contraction pattern that typically precedes a directional move. A push above 5% would unsettle equities, particularly if it coincides with September’s seasonal weakness.

Sentiment cooled to near-neutral. The Fear & Greed Index sits at dead center. Investors Intelligence bulls pulled back and bears ticked up, which removes some of the froth that had been building. That said, the bull/bear ratio is still close to levels that have previously flagged caution. Several of the market health indicators — up/down volume, new highs vs. new lows, breadth — are at neutral but hanging on by a thin margin.

NVIDIA’s post-earnings action is worth watching closely. The stock rallied on the report, then gave back ground on Friday. The broader stock-picking environment has gotten tighter. New breakouts aren’t following through, and late-cycle laggards are starting to surface. If defensive sectors like utilities and tobacco start leading, that’s a rotation worth respecting.

The Week Ahead

Tuesday: ISM Manufacturing

Wednesday: Broadcom (AVGO) earnings after the close

Thursday: ISM Services

Friday: August Employment Report

Fed Policy is drifting toward restriction. Odds of a hike at the next meeting run near 55%, with one…

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NBIS: tactical, buy around $210, stop $200.

MRVI: tactical, initial buy around $7.98, stop $7.20. Maravai LifeSciences serves as a high-margin, “picks-and-shovels” pure play on the secular growt…

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Nvidia lit the fuse Thursday, but the more useful information came from what the rest of the tape did with it. Forty-five minutes into market open, the broad advance fades away, with only 161 S&P 500 names were higher, and Nvidia was carrying the entire index gain by itself. Narrow strength like that tells us nothing.

By the close, the answer had shifted in our favor. The Nasdaq logged another follow-through day and settled near its session high, and the improvement in individual stock action was constructive.

Just as encouraging, the leadership was not all Nvidia. Our recent entry FROG cleared its pivot with a 12.10% gain, NET added 8.19%, and LITE began pushing toward the upper end of its range. Earnings read-throughs from CRM, CRWD and OKTA gave software and cybersecurity a lift, widening Technology’s footprint well beyond where it stood at the open.

The broadening stopped short of complete, though. ASML and MU were the two names we flagged pre-market as the real test of whether Nvidia could wake up semiconductor participation. Both finished lower. Technology got better, but the confirmation arrived through software, security and select growth names rather than a group-wide chip move.

Growth also delivered against an unhelpful rate backdrop. Firmer inflation data left the 10-year near 4.66%, yet the Nasdaq strengthened and multiple growth names broke out or extended. Stocks did not need yields to cooperate. When the market absorbs a headwind and leadership widens anyway, that is worth respecting.

Attention now turns to Kevin Warsh, who speaks at Jackson Hole at 10:00 AM ET, half an hour after the bell. Expect a noisy first reaction. What actually matters is whether Thursday’s winners keep their gains, whether recent breakouts continue to separate, and whether participation widens further once his remarks are digested.

Sector Highlights

Technology gave the clearest read on improving sponsorship, though the strength migrated away from semis. FROG closed near its high on volume 28% above normal, open position NET jumped 8.19%, and LITE worked toward the top of its range. Broader contribution from software and security is a healthier development than leaning on the largest AI names alone.

Semiconductors did not cooperate. ASML and MU both declined and remain pinned near their 50-day averages rather than responding to Nvidia’s report. Capital is flowing into Technology, just not evenly.

Industrials produced the cleanest price action.

Financials are starting to contribute.

Health Care remains split. CDNA followed through another 2.75% and continues to act well. LLY has broken down through its 50-day. Sponsorship here is name-by-name, not group-wide.

Don’t fight the market; bend with it. By protecting your downside with strict stops, let winning positions run, you allow the market naturally lead your money to where the gains are flowing.

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Marvell beat on every line and still fell about 8%. Here’s what actually happened.

The timing is the tell. The stock closed the regular session at $241.42, then slipped only ~2–3% in the first minutes after the 4:05pm release. It fell to $224.34 during and after the 4:45pm call — a 7.1% decline from the close, ~8.5% from Wednesday’s $245.11. The press release didn’t do this. The call did.

Four things drove it:

1. Gross margin guided down, and management named the cause. Q2 non-GAAP gross margin was 58.9%, already below the 59.4–59.5% Marvell ran through fiscal 2026. Q3 was guided to 57.5–58.5% — a 58.0% midpoint, another 90bps of sequential compression — because custom silicon ramps carry lower margins than optics and connectivity. So revenue accelerates from 37% to ~52% YoY, but the incremental revenue is worth less per dollar. At ~84x trailing earnings, the valuation is a claim about profit quality, not revenue. That claim got challenged.

2. The beat was a rounding error against the setup. Revenue $2.739B vs $2.71B consensus (+1.1%). EPS $0.94 vs $0.93 (one cent). The stock came in up ~188% YTD, having jumped ~10% on the August 19 Google warrant disclosure and again on Nvidia’s capex commentary Wednesday. The whisper number was well above published consensus. A 1% beat plus a margin guide-down is worse than what was priced.

3. The Google proof point got postponed. The warrant covers 58.97M shares (~7%) at $206.58, vesting in $500M tranches of Google custom revenue — measured from August 1, 2026, which is the last day of the quarter just reported. So this print structurally couldn’t contain Google revenue. Murphy raised FY27 to ~$12B and FY28 to ~$18B but deferred the actual roadmap to the October 6 Investor Day. Investors got a qualitative raise and a six-week wait, while the dilution mechanism is contractually certain and Google’s purchases are discretionary.

4. Custom acceleration is second-half loaded. Murphy put a public date on the inflection: 2H FY27. That’s a credibility commitment, but it also means the next two quarters are a “show me” window.

What it wasn’t: no miss, no guide cut, no bookings weakness. Data center grew 46% YoY to $2.171B (79% of revenue), operating cash flow hit $605.5M, and the multi-year outlook rose for a second straight quarter. This was a de-rating on margin mix and crowded positioning, not a demand break.

INVESTMENT IMPACT

■ Bookings, not revenue, is the story: cRPO accelerated to +14% after four straight quarters at 12–13%.

cRPO of $2.585B beat the $2.505–2.515B guide by roughly $72M — management characterized it as the largest cRPO outperformance since Q4 FY25. This matters far more than the $12M revenue beat. Revenue growth has been grinding down for six quarters (12.7% → 10.6%) while backlog growth stalled at 12–13%; a 200bp cRPO acceleration is the first genuine leading-indicator inflection since FY25. CFO Brett Tighe framed Q2 as a record bookings quarter for a non-Q4 period, attributed to higher pipeline conversion, in-contract expansion, and improved sales productivity. Total RPO of $4.858B (+17%) confirms the strength extends beyond the twelve-month window.

■ New-product attach is the mechanism — ~30% of bookings, with ~40% ACV uplift per attached product.

Okta disclosed that new products (Identity Governance, Privileged Access, Identity Threat Protection, and the AI-agent line) contributed roughly 30% of Q2 bookings, with Identity Governance the largest contributor, and that attaching any new product lifts deal ACV by an average of ~40%. This is the cleanest available explanation for backlog growth outrunning revenue growth: Okta is monetizing the installed base at higher price points without needing seat expansion. It also reconciles the otherwise-awkward combination of only +6% growth in $100K+ ACV customers (5,255) against >20% growth in the $1M+ ACV cohort (now above 600).

■ Margins beat by 220bps and FCF margin by ~710bps, but Q3 guidance embeds 300–400bps of sequential compression.

Okta, Inc. (OKTA) • Q2 FY2027 Earnings Update • August 27, 2026 • Page 1

Non-GAAP operating margin of 28.2% (+50bps YoY) and FCF margin of 28.1% (+580bps YoY) both exceeded guidance materially, putting the Rule of 40 at 42%. We would not extrapolate the Q2 level: Q3 is guided to 24–25% non-GAAP operating margin and 21–23% FCF margin, reflecting the Permiso close, reinvestment in the AI-agent portfolio, and normal seasonality. The full-year 26% operating-margin guide is unchanged, so the FY27 profit raise is essentially the Q2 beat flowing through rather than a structural step-up.

■ Maintaining BUY; raising PT to $185 from $150 — but the stock has already done most of the work.

OKTA is up ~28% today to roughly $172, taking out its 52-week high. Our new $185 target implies ~8% further upside, versus ~34% before the print. We are raising FY27E revenue 0.9% to $3.232B and FY27E EPS 2.9% to $3.96, and FY28E revenue 2.7% to $3.585B with EPS up 5.6% to $4.52. The thesis is intact and strengthened, but at ~36x FY28E EPS and ~7.6x FY28E EV/sales the multiple now discounts a durable reacceleration that is, so far, one quarter old. We would add on pullbacks rather than chase.

UBER: core, add around $76.60, accumulate in weakness.

Sell: Stick to the stop point.

Speculative Trades: Stick to the stop point.

GENB: Speculative, buy around $16.10, tight stop $15.80. Re-enter…

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The following day, August 26, the stock demonstrated technical strength as it attempted to emerge from its handle pattern via a mini outside day, confirming our early entry. The setup was validated today August 27 when FROG surged +10%, breaking out decisively above the cup and handle pattern structure. Under conventional technical trading rules, a pure breakout entry was triggered today as the stock cleared $99.22, the horizontal resistance line marked by the high point of the cup’s left side. By positioning early at $90.00 inside the handle rather than waiting for the conventional pivot, our trade secured a substantial profit (+12%) and significantly reduced risk exposure.

Although classical technical breakouts at key pivot levels possess merit, modern equity markets have made technical-only strategies increasingly vulnerable. The widespread presence of algorithmic trading programs, high-frequency execution networks, retail swing traders, and systematic trend followers frequently cluster around highly visible chart levels such as the $99.22 price threshold. This crowding distorts traditional breakout patterns, giving rise to sudden liquidity sweeps, whipsaws, and false breakouts that fail shortly after execution.

Our Fundamental and Technical (F&T) framework mitigates these microstructural flaws by using fundamental evaluation as the primary driver for equity selection, and technical as timing and early signal. Because underlying fundamental factors represent the ultimate force driving long-term stock price, integrating fundamental analysis ensures that entries are backed by true economic value rather than short-term price noise, thus improving win rates, reducing downside risk, and driving higher overall returns.